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The Latest in the Enterprise Software and Semiconductor Industry

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Part 7
The Latest in the Enterprise Software and Semiconductor Industry PART 7 OF 22

Why Seagate Is Still Producing HDDs When Preferences Are Shifting

HDD still popular with enterprises

Seagate (STX) has a plan to bump up the capacity of its hard disk drives (or HDDs) over the next 18 months. 

Interestingly, Seagate is talking about producing larger capacity HDDs when the world is shifting to solid-state drives (or SSDs). Is its management missing something? No—Seagate has a point.

Why Seagate Is Still Producing HDDs When Preferences Are Shifting

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While the mainstream market is moving toward SSDs and away from HDDs, the enterprise storage market has largely stuck with HDDs. Data centers mostly use HDD systems, and many enterprises are reluctant to shift to SSDs because of the high costs involved. As such, Seagate is eyeing enterprise spending on storage.

Worldwide enterprise external storage systems revenue was $6.4 billion in 4Q16, according to IDC (International Data Corporation) estimates, as we can see in the chart above.

16 TB HDD capacity

Seagate is working to produce a 16 TB (terabyte) HDD that’s aimed at the enterprise market. The highest capacity HDD in the company’s portfolio is currently a 10 TB drive, though it has a 12 TB drive in the pipeline.

As more objects get connected to the Internet under the IoT (Internet of Things) initiative, demand for storage is expected to continue growing, and Seagate is working to take advantage of opportunities both in the data center and desktop markets. After building a 16 TB HDD in the next 18 months, Seagate aims to add a 20 TB option in 2020.

However, Seagate must constantly watch its back for competition from Western Digital (WDC), Quantum (QTM), NetApp (NTAP), and Pure Storage (PSTG).

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